Exercise 15-13 Classifying investments in securities; recording fair values LO C1, P2, P3, P4, P5 The following information shows Carperk Company's individual investments in securities during its current year, along with the December 31 fair values. a. Investment in Brava Company bonds: $439,300 cost; $477,519 fair value. Carperk intends to hold these bonds until they mature in 5 years. b. Investment in Baybridge common stock: 29,500 shares; $349,244 cost; $379,628 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. c. Investment in Duffa bonds: $180,113 cost; $194,162 fair value. This investment is not readily marketable and is not classified as held- to-maturity or trading. d. Investment in Newton notes: $100,160 cost; $98,457 fair value. Newton notes are not readily marketable and are not classified as held-to-maturity or trading. e. Investment in Farmers common stock: 16,300 shares; $109,825 cost; $116,634 fair value. This stock is marketable, and Carperk intends to sell it within the year. This stock investment results in Carperk having an insignificant influence over Farmers. Required: 1. Identify whether each investment should be classified as a short-term or long-term investment. For each investment, indicate in which of the six investment classifications it should be placed. 2. Prepare a journal entry dated December 31 to record the fair value adjustment for the portfolio of available-for-sale debt securities. Carperk had no available-for-sale debt securities prior to this year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Identify whether each investment should be classified as a short-term or long-term investment. For each investment, indicate in which of the six investment classifications it should be placed. Type of Investment Classification of Long-term Investment a. b. C d e. Required 1 Required 2 > Long-term investment Short-term investment Controlling Influence (>50%) Debt Investments-Available-for-Sale Debt Investments-Held-to-Maturity Debt Investments-Trading Equity Method Investments (20%-50%) Stock Investments ( Record the fair value adjustment for the portfolio of available-for-sale debt securities. Carperk had no available-for-sale debt securities prior to this year. Note: Ente before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal Exercise 15-16 Preparing a statement of comprehensive income LO C2 $ Total comprehensive income Net income Change in value of available-for-sale securities $ 9,600 10,100 (2,200) Other comprehensive income Change in foreign currency translation (500) 1,700 Use the above information of Prescrip Co. to prepare a calendar year-end statement of comprehensive income. (Amounts deducted should be indicated by a minus sign.) Prescrip Co. Statement of Comprehensive Income For Year Ended December 31 0 Total comprehensive income $ 0
